SB 427

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
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
(1)  a municipality's annual financial statement
required to be filed under Section 103.003;
(A)  annual report required to be filed under
(B)  annual financial exhibit required to be
published under Section 114.022 if the county does not have a county
(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
(c)  Each application for a state program for which a
political subdivision may not be eligible for a loan or grant under
(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.