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Senate committee advances bill requiring local governments and water districts to file financial statements before state loans or grants
Summary
The Senate Committee on Local Government adopted a committee substitute to Senate Bill 427 that conditions state loans and grants on local governments' timely financial reporting; it adds an exception for entities affected by a state-declared disaster and extends requirements to water districts.
The Senate Committee on Local Government on Wednesday adopted a committee substitute to Senate Bill 427 that would require many local governments to be current on annual financial statements before receiving state loans or grants.
Senator Hinojosa, who explained differences between the filed bill and the substitute, said the measure responds to situations in which local entities receive state funds without filing required financial statements. "Local governmental entities receive loans and grants from the state in the millions and billions of dollars," Hinojosa said, and the substitute lets the state withhold new funds until entities are in compliance.
The substitute creates two notable changes from the filed bill: it allows an exception when an entity has been affected by a disaster declared by the state, giving that entity time to recover and comply; and it explicitly brings water districts under the reporting requirement. Hinojosa said the substitute also permits the state agency making a loan or grant to set up a procedure requiring financial statements from water districts that receive state funds.
Committee members voiced support for improved compliance and transparency. After procedural questions, Senator Cook moved to adopt the committee substitute; the committee then voted to report the substitute to the full Senate. The roll call recorded five ayes and no nays; individual recorded ayes included Chairman Bettencourt, Senator Middleton and Senator Cook. The committee later recommended the substitute for the local and uncontested calendar.
The committee did not adopt any changes at the meeting other than the committee substitute. The substitute leaves enforcement to the state agencies that make loans or grants, and it preserves a time-limited exception for entities subject to a state-declared disaster.
A summary of committee action: the committee adopted the substitute to SB 427, reported it to the full Senate with a recommendation that the committee substitute pass and be printed, and recommended the measure for the local and uncontested calendar.
