HB 187 — The establishment of the small municipality revenue reco

90R5632 GJD-F By: Gervin-Hawkins H.B. No. 187 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.

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, 2028.

SECTION 3. Not later than January 1, 2028, 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, 2027.