bill creating grants for towns losing 15 percent of revenue

The text as introduced · 536 words

89R3729 JBD-F

By: Gervin-Hawkins
H.B. No. 563

A BILL TO BE ENTITLED

AN ACT

relating to the establishment of the small municipality revenue

recovery grant program to provide financial assistance for economic

development to small municipalities facing severe economic

hardships.

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

SECTION 1. Subtitle A, Title 4, Local Government Code, is

amended by adding Chapter 110 to read as follows:

CHAPTER 110. MISCELLANEOUS FINANCIAL PROVISIONS AFFECTING

MUNICIPALITIES

Sec. 110.001. SMALL MUNICIPALITY REVENUE RECOVERY GRANT

PROGRAM. (a) In this section:

(1) "Grant" means a grant authorized to be awarded by

the comptroller under the small municipality revenue recovery grant

program established under this section.

(2) "Qualified municipality" means a municipality

with a population of 10,000 or less that experienced a decrease in

total revenue of at least 15 percent during the preceding municipal

fiscal year as the result of a reduction or termination of contracts

with private sector entities.

(b) The comptroller shall establish and administer the

small municipal revenue recovery grant program to support the state

purpose of ensuring the vitality of small municipalities throughout

the state by providing financial assistance for economic

development to qualified municipalities.

(c) To receive a grant, a municipality must submit an

application to the comptroller in the manner prescribed by

comptroller rule.

(d) The comptroller may award a grant to a qualified

municipality that applies for the grant using money appropriated to

the comptroller for that purpose or other available money,

including federal funds, that may be used for purposes of this

section. A grant must be in an amount of:

(1) not more than $7 million for economic development

programs; and

(2) not less than $100,000 or more than $7 million to

fund an economic development project described by Subsection

(e)(2).

(e) A municipality that is awarded a grant may not use grant

money for a purpose other than:

(1) economic development programs; or

(2) to fund one or more specific projects to create or

promote the creation of jobs in the municipality, which may include

the purchase of real and personal property and the construction or

improvement of new buildings, facilities, infrastructure, or other

improvements.

(f) The comptroller shall adopt rules necessary to

implement this section, including rules that establish:

(1) a standardized application process, including the

form to be used to apply for a grant, the manner of submitting the

form, and the information required to be submitted with the

application;

(2) deadlines for:

(A) applying for the grant;

(B) disbursement of grant money; and

(C) spending grant money; and

(3) procedures for:

(A) monitoring the disbursement of grant money to

ensure compliance with this section; and

(B) the return of grant money that was not used by

a municipality for a purpose authorized by this section.

SECTION 2. A qualified municipality, as defined by Section

110.001, Local Government Code, as added by this Act, may not apply

for a small municipality revenue recovery grant before January 1,

2026.

SECTION 3. Not later than January 1, 2026, the comptroller

of public accounts shall comply with the requirements of Section

110.001, Local Government Code, as added by this Act.

SECTION 4. This Act takes effect September 1, 2025.