By: Hinojosa of Hidalgo  S.B. No. 427          (In the Senate - Filed November 21, 2024; February 3, 2025,   read first time and referred to Committee on Local Government;   March 17, 2025, reported adversely, with favorable Committee   Substitute by the following vote:  Yeas 6, Nays 0; March 17, 2025,   sent to printer.)Click here to see the committee vote     COMMITTEE SUBSTITUTE FOR S.B. No. 427 By:  Cook     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.     * * * * *