Initial review · graded Oct 19, 2026 · Headline, summary and grade are analysis of the bill text, not a finding about any person · How we grade
Caption
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 annual financial reporting
requirements.
a city or county that skips the annual report misses that year’s money.
The bill bars a city, county, or other local government from getting a state loan or grant for any fiscal year in which it failed to file or publish its required annual financial statement or report. It touches municipalities, counties, and other political subdivisions, plus the state agencies that run loan and grant programs. State grant applications must warn local governments of the rule and make them prove they filed, starting with reports due on or after January 1, 2026.
Labels
Labels: CROSS-PARTY HANDOFF. Lead author Juan "Chuy" Hinojosa (D) in the Senate. Lead sponsor Denise Villalobos (R) in the House. Party as the Legislative Reference Library lists it for the 89th Legislature.GOT HALFWAY. Passed the Senate on Mar 24, 2025. Died in the House: voted out of the Intergovernmental Affairs committee 10-1, no floor vote.
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 annual financial reporting
requirements.
WHAT IT DOES
a city or county that skips the annual report misses that year’s money.
The bill bars a city, county, or other local government from getting a state loan or grant for any fiscal year in which it failed to file or publish its required annual financial statement or report. It touches municipalities, counties, and other political subdivisions, plus the state agencies that run loan and grant programs. State grant applications must warn local governments of the rule and make them prove they filed, starting with reports due on or after January 1, 2026.
CHARGES
[ ] NONE FOUND
TOTAL
No significant fiscal implication to the State is anticipated.
Names were not printed for yea. Only the named positions are included in member records.
Sources
Senator J. Hinojosa moved that Senate Rule 7.18 and the Constitutional Rule requiring bills to be read on three several days be suspended and that CSSB 427 be placed on its third reading and final passage. The motion prevailed by the following vote: Yeas 30, Nays 0.
Published stock of positions for this vote, except where marked derived.
Yea: 30 (published)
Nay: 0 (published)
Present, not voting: Not printed
Absent: Not printed
Excused: 1 (derived from named list)
Senate journal. Source snapshot 2026-10-19, Central time.
House committee · Intergovernmental Affairs · Committee vote 10 aye, 1 nay · Out of committee
Senate committee · Local Government · Committee vote 6 aye, 0 nay, 1 absent · Out of committee
Subjects
City Government--Finance
County Government--Finance
Disaster Preparedness & Relief
Political Subdivisions
State Finances--Management & Control
LOANS
Text
The text as introduced · 330 words
89R303 AMF-D
By: Hinojosa of Hidalgo
S.B. No. 427
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 annual 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, "annual financial statement or
report" means:
(1) a municipality's annual financial statement
required to be filed under Section 103.003;
(2) a county's:
(A) annual report required to be filed under
Section 114.025; or
(B) annual financial exhibit required to be
published under Section 114.022 if the county does not have a county
auditor; or
(3) a political subdivision's annual financial
statement required to be published under Section 140.006.
(b) 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) 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.
SECTION 2. The change in law made by this Act applies only
to an annual financial statement or report, as defined by Section
140.014, Local Government Code, as added by this Act, required to be
filed or published on or after January 1, 2026.
SECTION 3. This Act takes effect September 1, 2025.
Monitoring 